Is monetary policy possible without an issuance function: the case of Montenegro

Nikola Fabris and Zorica Kalezic

International Journal of Economic Policy in Emerging Economies, 2008, vol. 1, issue 4, 356-375

Abstract: Since the end of 1999, Montenegro belongs to a group of dollarised economies. The process of dollarisation in Montenegro has had positive implications on economic performance. However, by renouncing the issuance function, the country gave up some significant monetary policy attributes. Since the Central Bank of Montenegro has a certain number of monetary policy instruments at its disposal such as reserve requirement policy, short-term liquidity loans, possibility of conducting open market operations and a potential role of the lender of last resort, this begs the question whether it possible to perform independent monetary policy under such conditions.

Keywords: dollarisation; monetary policy; Montenegro; reserve requirement; economic performance; issuance function; short-term liquidity loans; open markets; lender of last resort; central bank. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:1:y:2008:i:4:p:356-375

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